NZ gaming industry beats its high score!

This week, the Interactive Games & Entertainment Association (IGEA) reported that sales of interactive entertainment games hit $392 million in 2015, up 13% from 2014.

Traditional retail sales were up 4.5% to $136 million and digital sales up 18% to $256 million. The interactive games market includes hardware, packaged games, subscriptions, digital sales and mobile games.

Market data from NPD Group attributes the steady growth of software and ancillary products, including accessories, interactive toys and games, and subscription cards, to the rapid adoption of the current generation console hardware.

“The robust growth of New Zealand’s video games industry is testament to a strong gaming culture,” says said Ron Curry, CEO of IGEA. “Telsyte’s research shows that New Zealanders are keen on early access to games, with one in four buyers willing to pay in advance to play a game before the official release date. While there is no doubt that there has been diversification in the games market, retail sales were also strong.”

Additional research on the digital games market commissioned by IGEA was supplied from analyst firm Telsyte which confirmed that the popularity of the current generation consoles had led to increased digital game downloads in 2015. PC game downloads also increased, while mobile games continued to make up the largest segment of the digital games ecosystem.

“The New Zealand interactive games industry continues to flourish on all fronts cementing itself as a key segment of the entertainment industry,” says Foad Fadaghi, managing director of Telsyte. “New Zealanders’ appetite for digital downloads of full games has grown strongly and is set to make up around a third of all games sales by 2016.”

Screenshot from Mini Metro a popular game developed by Wellington-based Dino Polo Club

And it’s not just Sony and Nintendo (and their distributors) that are making all that money. Stephen Knightly, chair of the New Zealand Gaming Industry says the homegrown segment of the gaming industry “one of the most successful hi-tech industries in the country. We'll be $100 million exporter this year,” 80-90% of which will be exports.

Knightly says independent distribution channels have radically changed the New Zealand gaming industry over the last six or seven years.

"We used to have a barrier of entry of getting to international markets,” he says. “It used to be we'd somehow get to San Francisco or Tokyo and cut a publishing deal with Sony, Nintendo or Microsoft. As soon as app stores and decent broadband arrived, New Zealand leapt in. We got in early on digital distribution, independent distribution. That's what's behind us going from $10 million to $100 million in exports in five years. And every game studio in New Zealand, apart from possibly two, is New Zealand owned. Because of independent publishing, New Zealand's own their IP in the gaming industry."

Having more control over your distribution not only gives developers more access to markets, it also keep consumers loyal to particular developers, who become like a loved author that the player follows from title to title.

"As a developer, digital distribution means you've got so much more control over your destiny – you're not answering to anyone else,” says Knightly. “It’s also scarier because not only are you the developer, you're also the publisher. But that means you've got a direct relationship with your customers. You get direct feedback and you develop a fanbase and that fan base then becomes the people who buy your next game and the game after that."